Editor’s note: This is the premiere of a new Business Journal series that shines a spotlight on businesses, trends, products and services that are beginning to take root in other markets but have yet to make their presence known in this region. Could these intriguing endeavors be “the next big thing” in shaping the local business scene? Only time can tell – but, at the very least, you learned about them here first!
As the managing partner in the New York City investment management company Case Equity Partners LLC, Shlomo Chopp is in a constant struggle to locate commercial real estate that brings the proverbial biggest bang for the buck.
“We own a lot of properties and must satisfy the needs of my investors with good, quality investments,” he stated.
While Chopp was partial to retail properties, he acknowledged that current economic trends make it a “risky proposition to buy retail” — with the increased dominance of e-commerce chipping away dramatically at the traditional brick-and-mortar model. But people have not completely abandoned the in-store experience and more than a few digital-exclusive brands were eager to come off the internet and become part of the in-person shopping experience.
“We needed a new concept that changes everything about retail,” theorized Chopp, who created the startup ShopFulfill with the goal of bringing digital natives into the brick-and-mortar setting.
In the second quarter of 2020, Chopp will debut his new concept with the launch of Anchor Shops in Philadelphia’s downtown Fashion District. In its initial presentation, Anchor Shops will house more than 40 native digital retailers that will lease space at an average beginning at roughly $800 per month.
But unlike other retail complexes, Chopp’s ShopFulfill operation will enable these first-time retailers to share staff, warehousing and transportation costs. ShopFulfill will also operate a fulfillment center at the Moorestown Mall in Moorestown, New Jersey, thus offering the retailer tenants inventory assistance with both their e-commerce orders and buy-online-pick-up-in-store service options.
Chopp noted this would benefit digital natives trying to establish an offline presence by giving them the logistical support that longtime brick-and-mortar retailers enjoy.
“Our new tenants would otherwise not be positioned to be tenants,” he said. “We tell them, ‘Just produce your great products and we’ll help you increase sales.’ ”
Both the Philadelphia retail complex and the New Jersey fulfillment center are owned by Pennsylvania Real Estate Investment Trust (PREIT). Joseph F. Coradino, chairman and CEO of PREIT, issued a press release praising Chopp’s concept as the next evolutionary stage in the retail ecosystem.
“Shoppers who frequent our properties will be able to engage with new, exciting and emerging brands, making the merchandising mix at properties like Fashion District Philadelphia even more compelling,” Coradino said. “Solving logistics and infrastructure challenges positions these brands for sustainable growth within our portfolio.”
Chopp envisions Anchor Shops as an alternative to the so-called “no-product stores” where consumers place their orders in a retail outlet and then go home to wait for the item to be shipped to them. Under his plan, ShopFulfill would manage the inventory needs of the Anchor Shops tenants, so they would never find themselves with too little or too much merchandise in their retail setting and in the New Jersey fulfillment center.
Chopp also believes Anchor Shops could be brought into the traditional mall setting to occupy large anchor store spaces, both as a means to fill a tenant void or as a strategy for allowing existing retail tenants to downsize into a more profitable and manageable space within the mall.
News of his venture spread quickly in the e-commerce world.
“We’ve heard from brands that we never knew existed,” he said. “They told us, ‘We want to participate.’ They don’t have the budget to spend $100,000 for opening costs on their own store.”
Chopp’s goal for Anchor Shops is to establish a presence in 80 regions across the country. While there are no immediate plans to set up Anchor Shops outlets in Westchester or Fairfield counties, he offered an assurance that any local consumer visiting the Philadelphia flagship location will have an item at their home in 24 hours.